FSA hits back at MMR criticism
Share
Speaking at Mortgage Strategy’s Mortgage Masters event yesterday, Lynda Blackwell, mortgage policy manager at the Financial Services Authority, hit out at the criticism against the Mortgage Market Review.
Blackwell, says: “There has been a lot of unhelpful commentary and debate assuming that what we have suggested is going to happen.
“That’s been a distraction that has frankly got in the way of moving the debate forward.
“Our proposals are nothing more than consultation suggestions on which we have invited your views. We really want those views and it would be helpful for us to have your suggested solutions – and not just criticism of ours.”
She says the headlines also suggest a polarisation of views between themselves and the industry.
But she says: “That’s certainly not my view, having spoken to many market participants.”
She adds: “Of course there are different vested interests in the market and the fact is that we are not going to be able to please everyone. There will have to be some give and take - but it is really important that we all work together and have a clear understanding and shared view about how to achieve our objectives for the market.”
Blackwell says there has been some criticism – from the Association of Mortgage Intermediaries for example – about the ‘fragmented’ approach that it has taken in breaking the MMR into particular subject areas.
But she says: “This is a huge and difficult task and, having set out the overall picture in the discussion paper last October, we have very deliberately taken a building blocks, phased approach, carefully looking at each of the constituent parts.
“We will not reach any final conclusion on the appropriate package of actions to take without conducting a complete impact assessment, not just on each individual measure, but also on the effect in the aggregate. We plan to publish our initial indicative analysis of the impact of our proposals in the first half of 2011.
“We will also be consulting on appropriate transitional arrangements until we have a clearer idea of the final proposals, of course, it is not possible for us to determine the impact or decide on what the transitional arrangements need to be.
“But we will be giving careful consideration to the impact of our proposals on existing mortgage holders and the need to ensure that we don’t make worse the problems for those borrowers who already find themselves unable to switch products or lenders.”
Blackwell says the regulator has been in talks with the European Commission about mortgage regulation and it is interested in many of the same topics that the FSA has been considering and she says it has a “shared view” of the principles underlying responsible lending.
She says: “So, for example, we are both interested in seeing a robust assessment of affordability. We aim to build on this understanding over the coming months, and of course we will reflect on any European proposals as we refine our MMR thinking.”
She says whilst the headlines about responsible lending have gone to the lending industry, intermediaries have expressed a number of concerns about the responsible lending proposals.
She adds: “A big concern has been the likely lender approach to dealing with proposals for expenditure assessments that we deliberately kept at a high-level to give firms the flexibility they requested.
“Views on this will of course depend on the particular intermediary business model - those intermediaries, for example, who have built a model based on the smooth processing of large volumes of business may have a concern about the disparate ways in which lenders may approach expenditure assessments.
“So far, we have had a relatively positive reaction to the proposals from the intermediary community. And as I said previously, we look forward to continuing our discussions with you.
“To repeat what I said earlier, I really hope we can all work together on this and have a clear and shared view about how to achieve a healthy and sustainable UK housing market that works well for customers.”
If you enjoyed this article, sign up here to receive daily email updates from Mortgage Strategy and Follow @mortgagestrat
View results 10 per page | 20 per page
Readers' comments (17)
Lee Chester | 14 Jan 2011 1:28 pm
“That’s certainly not my view, having spoken to many market participants.”
So she has spoken to the banks, the FSA's buddies. She goes on to say...
''there has been some criticism – from the Association of Mortgage Intermediaries for example – about the ‘fragmented’ approach that it has taken in breaking the MMR into particular subject areas.''
So the professional body of mortgage ''advisers'' ,key word as the banks only ''arrange'', is blasted for being critical??
This is almost comical. When will the FSA take their tongues out of the backsides of the banks? And start listening to the professionals??
Unsuitable or offensive? Report this comment
john | 14 Jan 2011 1:47 pm
I have never read so much two faced rubbish in my life. What drugs is she on?????????
Unsuitable or offensive? Report this comment
Paul | 14 Jan 2011 1:53 pm
She is "blasting" mortgage intermediaries for unhelpful criticism without any contructive input, as you so eloquently demonstrate.
I like her statement about a "robust assessment of affordability" though, as this is the very essence of the problem.
Unsuitable or offensive? Report this comment
Mike The Mortgage Man | 14 Jan 2011 2:01 pm
Well now I pay my fees to the FSA and then they want me tell them how to regulate!Ridiculous.
The FSA are no more than bully boys who are impotent in regulating the Banks.This crisis is mainly due to banks not understanding how to value risk and i have seen nothing to see this as having been changed.
Of course the FSA have pushed the mortgage intermediary market offside by basing their opinions on a flawed assumption of self cert and fast track being the same thing.
Finally if the FSA want to improve the market try reintroducing insurance for high risk loans and getting the conveyancers to repay the loans in debt consolidation cases.
Unsuitable or offensive? Report this comment
Jeremy | 14 Jan 2011 2:14 pm
Let me save the country and industry £millions. I`ll have Lynda`s job ;;;
Ban proc fees
Ban dual pricing
Make disclosure of status legally enforceable; and take the cheats to court. (Bank and tied advisers beware)
Make all advisers / intermediaries responsible for the advice given whether they be bank based or independent. And get the lender and adviser to offer the borrowers regular circumstance reviews;
All we need then is more availability of funds.
Unsuitable or offensive? Report this comment
anon | 14 Jan 2011 2:35 pm
You do realise that banning dual pricing all means an end to broker exclusives - are you sure you want this?
Unsuitable or offensive? Report this comment
Dave | 14 Jan 2011 2:40 pm
The very fact that they could pose the question as to whether or not Interest-only mortgages should be outlawed shows how out of touch with reality they are.
Of course, they are rpaidly backtracking now, saying that it was only a consultation point... they didn't mean it really!
Similarly, there was a proposal to 'ban people who present certain high risk characteristics from obtaining a mortgage'! Just because something is difficult is not a reason to ban it. What about all those people who already have mortgages who will otherwise be stuck with sub-prime rates for the rest of the term if they are banned from remortgaging.
Lenders have the biggest influence with the FSA, so we need ALL intermediaries to make their views known to the FSA whilst they still have the chance. If you don't, you could find the industry moving in a direction that is detrimental to your business and to the interests of your clients.
There is still time to respond to CP10/28 - don't just leave it to others. Read how the FSA is thinking (now there's an oxymoron) and tell them your opinion.
Unsuitable or offensive? Report this comment
James | 14 Jan 2011 3:13 pm
Whether by ignorance or design the FSA are hell bent on destroying the UK House market. They appear to be in direct conflict with the views of the present government and in particular to that of Mr Schapp.
At what stage will the FSA accept that their days are numbered and start acting responsibly?
Unsuitable or offensive? Report this comment
mic2002 | 14 Jan 2011 4:15 pm
Next time mortgage strategy is meeting with the FSA then give me a shout and I'll let them know exactly what I think of them!So there are intermediaries out there who AGREE with the MMR
Are they out of their tiny minds??! The only decent thing in there was the individual registration and they dropped that becuase the CML squealed that much about it.When they want a professional orderly market then I'm ready - but you cant do that with a crazy policy of allowing NON-ADVISED sales in such large numbers via the banks.Now what we are left with is even more regulation for the advised sector and virtually nothing on the non advised.And she's telling us brokers agree with this??!!
Unsuitable or offensive? Report this comment
Robin Banks | 14 Jan 2011 4:46 pm
It would be laughable if it was not so serious;
Quote “Blackwell says the regulator has been in talks with the European Commission about mortgage regulation and it is interested in many of the same topics that the FSA has been considering and she says it has a “shared view” of the principles underlying responsible lending.
Blackwell went on to comment; “So, for example, we are both interested in seeing a robust assessment of affordability. We aim to build on this understanding over the coming months, and of course we will reflect on any European proposals as we refine our MMR thinking.”
When oh when have the otehr European states EVER complied with anything that impacts on the individual states self interest? (they even broke their own budget rules, that's why the Euro is in such a mess)
Come up here (north of Watford) Ms Blackwell and talk to the local farmers and the cattle men, the hill farmers, the building contractors, engineering companies, the food producers etc. etc.
They will all tell you that it is THEM who are put at a huge disadvantage because THEY comply with EU regulation whilst their counterparts in the EU do not comply and then reap the rewards.
Once their is a sniff of a property turn around do you think the other EU states will play ball on mortgage regulation in the same way we will? if you do then you are more stupid than I thought.
There's no hope when you have people like this in charge!
Unsuitable or offensive? Report this comment